Does foreign direct investment （FDI） into developing countries affect the growth of local firms in host countries？ Using a dataset of 38 sectors in China ＇s electrical and electronics industry, in this paper, we a...Does foreign direct investment （FDI） into developing countries affect the growth of local firms in host countries？ Using a dataset of 38 sectors in China ＇s electrical and electronics industry, in this paper, we analyze whether FDI has a positive effect on loeal firms, with technology spillovers, added value and increasing total faetor productivity, or a negative, market stealing, effect. Estimating the relationship between growth of local firms and investment offoreign firms, our results show that FDI is likely to have a negative impact on the growth of local firms in sectors with large disparities in technology and less experience in business. Therefore, local firms lacking in technology need to find markets with no competition from foreign firms or determine strategies to compensate technology disparities.展开更多
文摘Does foreign direct investment （FDI） into developing countries affect the growth of local firms in host countries？ Using a dataset of 38 sectors in China ＇s electrical and electronics industry, in this paper, we analyze whether FDI has a positive effect on loeal firms, with technology spillovers, added value and increasing total faetor productivity, or a negative, market stealing, effect. Estimating the relationship between growth of local firms and investment offoreign firms, our results show that FDI is likely to have a negative impact on the growth of local firms in sectors with large disparities in technology and less experience in business. Therefore, local firms lacking in technology need to find markets with no competition from foreign firms or determine strategies to compensate technology disparities.
